January 06, 2020
5G Is Currently Being Priced At A 20% Premium Globally
Ericsson has just published the results of its latest Mobility Report mobile industry forecast. The usual big numbers are there - 5G subscriptions are expected to total 13 million by the end of the year, 2.6 billion by the end of 2025, and that consequently mobile communications technology is expected to be the fasted-deployed in history etc etc.
But the report also points out that far from 5G mobile broadband services forcing operators further down the pit of profitless despair, most appear to be doing nicely at this point. Ericsson says its report “takes an in-depth look at service providers’ tariff plans, revealing that most service providers who have launched 5G have priced 5G packages about 20 percent higher than their nearest available 4G offering.”
The promotional pricing currently being offered is coming in at a 20% premium to 4G.
Very simply – This price is insufficient to cover the incremental costs associated with 5G and the associated increase in data traffic.
The wireless industry is not exactly the first to use a promotional price to drive increased volume; and like most industries the promotional pricing will be limited to its financial capacity to deliver that promotional price.
We have seen the following :
3G Promotional pricing existed for the duration of 3G due to the strength of the balance sheet of the wireless operator community 4G Promotional pricing existed for half the duration of 3G and half the length of 4G availability due to the weakening of the balance sheet 5G Promotional pricing will exist for an extremely limited time due to the atrocious level of debt wireless operators are carrying on their balance sheet
5G Is currently more expensive and will get considerably more expensive in the near term vs. 4G
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